MPs' expenses: Cabinet meltdown as Jacqui Smith heads resignations

Gordon Brown is facing a major Cabinet crisis after the resignation of three
of his senior ministers threw the Government into disarray on the eve of
critical local and European elections.

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The former Home Secretary Jacqui SmithPhoto: PA

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Jacqui Smith and Gordon Brown: Jacqui Smith is to resign from the CabinetPhoto: PA/REUTERS

By Andrew Porter, Political Editor

9:44PM BST 02 Jun 2009

Jacqui Smith, the Home Secretary, dealt the most serious blow to the Prime Minister’s authority. It emerged that she will step down from the Cabinet when Mr Brown reshuffles his team after what Labour fears will be its worst performance at the polls for a generation.

She had been under pressure for weeks over expenses claims made by her husband on her behalf, including for two pornographic films. However, the public disclosure of her departure before tomorrow’s elections threw Mr Brown’s reshuffle off course.

Sources close to Downing Street suggested that Miss Smith’s decision only became public after it was leaked by friends of Hazel Blears, the Communities Secretary, who was criticised by Mr Brown over her expenses claims.

On a tumultuous and chaotic day at Downing Street, it was also announced that Beverley Hughes would move aside from her job as Children’s Minister and not stand at the next election and that Tom Watson, the Cabinet Office Minister and key ally of Mr Brown, would leave the Government.

With speculation intensifying that Alistair Darling, the Chancellor, will become the most high-profile victim of the reshuffle, and that David Miliband might also be replaced as Foreign Secretary, it raised the prospect that the three great offices of state could change hands.

But in a sign that Mr Brown may face a mutiny if he tries to overhaul all of his key personnel, Mr Miliband said he wanted to stay in his post. Mr Brown is reportedly toying with the idea of replacing him with Lord Mandelson, the Business Secretary. William Hague, the shadow foreign secretary, said that the Government had “lost all authority and the ability to govern”.

The turmoil came as:

A group of opposition MPs said that they would table a motion next week seeking an immediate general election;

Another two Labour MPs, David Chaytor and Patricia Hewitt, said that they would be standing down at the next election. Mr Chaytor has quit following The Daily Telegraph’s disclosure that he claimed for interest payments on a mortgage that did not exist;

A third, Ian Gibson, was banned from standing again by the party’s “star chamber” disciplinary body following allegations about his use of parliamentary allowances. This immediately caused a row with his local party which accused the Labour leadership of running a kangaroo court.

A total of 15 MPs are now standing down at the next election as a result of The Telegraph’s investigation into MPs expenses.

Harriet Harman, Labour’s deputy leader, was forced into a desperate denial of claims that Mr Brown’s administration was in meltdown. “It is not the wheels falling off the Government,” she said.

Opinion polls suggest that Labour is heading for a humiliating set of localand European electionresults when the country goes to the polls tomorrow.

Mr Brown, who confirmed for the first time yesterday that he is planning a reshuffle, is under intense pressure to deliver a shake-up that wrestles back some semblance of authority for his administration.

He is considering replacing Mr Darling with Ed Balls, his close friend and Schools Secretary, but such a move could be politically explosive within some elements of the Labour party. Mr Darling could be offered the Home Office as compensation.

Mr Miliband gave Mr Brown another headache yesterday by insisting that he wanted to remain as Foreign Secretary for another four years. “I’m focusing on my job. I have got four more years until I beat Ernie Bevin as the longest-serving foreign secretary,” he said.

Miss Smith’s friends said last night that she had been troubled by the exposure of her husband’s claim for adult movies. She had also been under pressure after designating her main home as a room in her sister’s London house, allowing her to claim expenses on her family home.

It was unclear who leaked the news of her departure which was only known by two other people in Cabinet, including the Prime Minister. The other is likely to have been Hazel Blears, a friend of Miss Smith. Last night a Whitehall source said that the news may well have been leaked by someone who wants to “destabilise Gordon Brown”. Miss Blears fell out of favour with the Prime Minister, after writing an article in which she mocked his recent appearance on YouTube. He then criticised her publicly for failing to pay capital gains tax on the sale of her second home. She later repaid £13,000. She is also widely expected to be demoted in the reshuffle or sacked. One senior Labour figure said: “Hazel should wait until Friday morning then announce she’s leaving the Cabinet and standing for the leadership.”

Labour sources said that many of the party’s MPs were in a state of panic. A private meeting of the Parliamentary Labour Party was described by MPs as “emotional and jittery,” with several backbenchers openly accusing Mr Brown of lacking leadership and direction.

Some Labour MPs reported that a list could be circulated soon with names of those who want Mr Brown to stand aside for the good of the party.